It’s been a tough journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was going downhill after the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. Each time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run, being patient and disciplined is crucial.